Overdue audit could have consequences for county

Commissioners worried but say there's not much they could do

Mar. 28, 2013

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For the second time in two years, Greene County officials face criticism over financial management and are at risk of serious consequences.

Moody’s Investor Services, the well-respected investor rating firm, rebuked the county in December 2011 for financial missteps that included failing to make a bond payment on time.

Moody’s asked for a finalized 2011 audit report to be submitted by July. More than eight months later, Moody’s — as well as the commissioners themselves — have yet to see it, county officials acknowledged when questioned by the News-Leader.

The failure to produce the report could lead to another bond rating drop — making future borrowing more difficult and more expensive.

Or worse.

The county’s bond rating dropped four notches in late 2011 — an unusual circumstance, according to a Moody’s spokesman.

With Moody’s still waiting for the final audit report for that year, the concern that even more negative financial consequences could come the county’s way is palpable.

“There is always a concern that could happen,” said Associate Commissioner Harold Bengsch. “You can’t rule that out.”

Commissioners were visibly uncomfortable when asked about the unfinished audit Tuesday, but they shied away from the term “frustrated.”

“I have been worried,” Associate Commissioner Roseann Bentley said.

“I think worry is a good term,” said County Administrator Tim Smith.

The officials declined to be specific about other possible repercussions.

Commissioners powerless

The final audit report is the sole responsibility of the county’s auditor — an officeholder who does not directly answer to the county commission.

Presiding Commissioner Jim Viebrock said, “The commission is accountable over everything but has authority over not much.”

“You can ask, you can volunteer, but you can’t order,” Bengsch agreed.

Although state law divides officeholder responsibilities with the intention of discouraging wrongdoing, all three commissioners said this is one example of when having autonomous officeholders becomes tricky.

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There has to be a little bit of déjà vu for everyone involved.

One of the reasons Moody’s cited for the 2011 downgrade was incomplete audits for several previous years.

Commissioners explained then that the audits had not been filed on time because of a pending investigation into embezzlement at the Treasurer’s Office.

The employee responsible has since pleaded guilty to the crime and the county has been able to access the needed records — previously held as evidence — in order to catch up on the audit reports.

Moody’s officials then encouraged the county to have the 2011 audit finalized by July.

Why?

Smith said the delay has been the result of workload issues in the auditor’s office.

The office has been closed all week. Smith said Stein opted to close the office to focus on finishing the audit.

Stein had been pulling double duty for a time following the resignation of the county’s budget officer last year. By state law, the auditor takes over budget responsibilities during the interim.

A new budget officer was hired in October, but Stein remained a player in the budget process throughout the transition.

Then the longtime chief deputy auditor, Justin Hill, was elected to the treasurer’s seat. He took the position Jan. 1. The commission has since hired his replacement.

Asked whether commissioners should have done anything differently, Bengsch said he couldn’t think of a way the commission could have stepped in. Viebrock and Bentley agreed.

“We offered to give her any kind of assistance she needed,” Viebrock said.

What's next

If Moody’s does again drop the county’s bond rating, it will affect the interest rate at which the county does any future borrowing.

At worst, the drop could affect bonds the county currently holds.

“I think that would be extreme,” Smith said.

Asked what commissioners think would happen, none of the three were willing to speculate.

The News-Leader has made a Sunshine Law request seeking documents discussing the unfinished audit. A response is expected by the end of the week.

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Timeline

November 2011: County misses, by a day, a payment on the bond for the new Public Safety Center.
December 2011: Moody’s Investor Services downgrades the county’s bond rating a significant four notches, citing the missed payment and untimely reports.
June 2012: County is forced to sell property to make payment $1.35 million for its portion of the Missouri Highway Patrol’s Crime Lab in Springfield, which was not in the budget.
June 2012: County Budget Officer Jeff Reinold resigns. Per state law, county auditor’s office takes over budget office duties.
July 2012: Suggested deadline set by Moody’s for the 2011 final audit to be completed. Deadline is not met.
October 2012: New county budget officer is hired. Auditor’s office continues to help with budget duties throughout transition
January 1, 2013: Chief Deputy Auditor Justin Hill is sworn in as county treasurer after winning November’s election.
January 2013: Greene County budget for 2013 is officially signed.
Wednesday: County commissioners say they still have not seen the 2011 audit report.